A tug-boat directing a cargo vessel to a berth at Mombasa Port. PHOTO/FILE
By ANDREW MWANGURA
Kenya’s maritime potential stays largely untapped, regardless of the nation’s appreciable strategic benefits and entry to key worldwide transport routes.
With solely 25 service provider vessels registered underneath the Kenyan flag in 2020—out of 1,849 ship visits to Kenyan ports that 12 months—it’s clear that Kenya is lacking out on a big alternative for financial development and regional management in maritime affairs.
At present, round 28 service provider ships owned by Mombasa-based firms are registered underneath international flags of comfort, whereas one other 11 bulk carriers are equally flagged overseas.
This widespread follow leads to a direct monetary loss to Kenya—an estimated Sh 1.2 billion yearly in tonnage charges alone. These charges, if retained, might be reinvested into bettering the nation’s maritime infrastructure, coaching its workforce, and bolstering its worldwide standing.
This situation highlights a crucial problem: the shortage of a aggressive home registry that draws vessel homeowners to register underneath the Kenyan flag. Whereas international open registries equivalent to Panama, Liberia, and the Marshall Islands dominate, Kenya stays relegated to the periphery of this extremely profitable sector.
The worldwide service provider fleet at present contains over 100,000 vessels, with complete deadweight tonnage exceeding 2.1 billion tonnes. Kenya’s exclusion from this community means it forgoes vital alternatives for each financial development and regulatory affect.
Moreover, specialised sectors inside the maritime business current distinctive alternatives for development, together with offshore oil and gasoline fleets, offshore provide vessels (OSVs), and the cruise business.
With East Africa’s offshore power exploration on the rise, Kenya has the potential to turn out to be a beautiful registry for Floating Manufacturing Storage and Offloading (FPSO) models—of which there are roughly 175 worldwide.
Equally, the worldwide OSV fleet, which helps offshore power manufacturing, numbers over 3,000 models. Establishing a aggressive registry for these specialised sectors would place Kenya as a maritime hub within the area, offering each business advantages and employment alternatives.
The cruise business, regardless of latest setbacks, continues to broaden globally. With an estimated 270 ocean-going vessels, this sector may additionally profit from a Kenyan registry providing aggressive charges and a powerful fame for security and sustainability.
The creation of an Worldwide Open Ship Registry (IOSR) would mark a transformative shift in Kenya’s maritime coverage. Such a registry wouldn’t solely generate rapid income but additionally function a catalyst for long-term improvement, positioning Kenya as a regional maritime chief.
Past monetary features, an IOSR would stimulate job creation, strengthen maritime governance, and improve Kenya’s standing in worldwide maritime our bodies.
Nevertheless, to make this imaginative and prescient a actuality, Kenya should handle a number of key challenges. First, it wants to supply extra aggressive monetary incentives. Transport tax havens and tax holidays might be launched to make registering underneath the Kenyan flag financially engaging.
With present developments exhibiting a desire for international flags, it’s crucial to create a local weather the place Kenyan registration turns into a rational financial alternative. Second, Kenya should undertake inventive financing fashions to help the capital-intensive nature of the transport business.
Establishing a devoted Cabotage Vessels Financing Fund, alongside public-private partnerships utilizing pension funds, may assist promote native possession of transport property and mitigate the excessive prices of entry into the sector.
A cruise ship at Mombasa Port. PHOTO/FILE
Third, the nation’s regulatory frameworks, such because the Service provider Transport Act, should be up to date to accommodate fashionable maritime wants. The legal guidelines governing cabotage—vessel operations inside nationwide waters—ought to shield home pursuits whereas additionally encouraging international participation.
A aggressive ship registry requires way over a easy administrative overhaul. It necessitates a complete suite of fiscal incentives designed to draw each home and worldwide shipowners.
For instance, registration charge rebates for early adopters would encourage transport firms to make the swap to the Kenyan flag. Moreover, administrative value reductions and gasoline rebates would assist alleviate the operational burden on transport firms, making Kenya a extra engaging vacation spot for international fleets.
A Tonnage Tax regime, akin to these in maritime powerhouses such because the UK, Greece, and Singapore, would supply fiscal certainty. This tax system, which taxes ships based mostly on their internet tonnage moderately than earnings, provides predictability and stability—qualities that enchantment to transport companies searching for dependable fiscal environments.
Equally crucial to the success of a Kenyan ship registry is the event of a talented workforce. Establishing a Kenyan Service provider Navy Coaching Board (MNTB) could be a pivotal step in making a complete system for maritime training and coaching.
This board would be certain that maritime programs align with worldwide requirements, that cadetship programmes are created in partnership with transport firms, and that seafarer certification complies with the Worldwide Conference on Requirements of Coaching, Certification and Watchkeeping (STCW).
Moreover, subsidies for cadetship coaching and seafarer tax exemptions may incentivise each firms and people to put money into creating native expertise. This may not solely strengthen Kenya’s maritime workforce but additionally make the Kenyan flag extra engaging by guaranteeing the provision of skilled, competent seafarers.
The implementation of an Worldwide Open Ship Registry in Kenya would provoke a virtuous cycle. Registration charges may fund important infrastructure and coaching programmes, whereas a stronger regulatory framework would improve security, environmental compliance, and Kenya’s skill to affect worldwide maritime insurance policies.
As well as, with larger native possession, Kenyan stakeholders may benefit from the long-term financial returns of a flourishing maritime sector.
In flip, Kenya would achieve a extra influential voice in international maritime boards, permitting the nation to form insurance policies that replicate its personal nationwide pursuits and regional aspirations.
Kenya stands at a pivotal second in its maritime historical past. With the potential to seize misplaced tonnage charges and considerably enhance its maritime profile, Kenya should act decisively to determine a aggressive and sustainable maritime registry.
By implementing sound fiscal insurance policies, updating authorized frameworks, investing in human assets, and creating strategic incentives, the nation can place itself as Africa’s main maritime hub.
The time to behave is now. Kenya’s maritime future is stuffed with untapped potential—by seizing the chance to determine an Worldwide Open Ship Registry, the nation can rework its maritime sector right into a key pillar of its financial and regional management.
